Strong sales growth, but sales margin is under some pressure.

The company's retail sales maintained rapid growth in July and August, growing by more than 25% year-on-year (first half of 21: 30% year-on-year). Tianlun Gas is optimistic about its natural gas sales prospects for the second half of 21 years and its full-year guidance of 25 per cent year-on-year growth. In anticipation of tight winter supplies, management has begun to approach LNG suppliers earlier than in previous years (LNG accounted for 11 per cent of its total sales last year, compared with 5 per cent under normal circumstances). The gross margin of sales in the third quarter of 21 has rebounded from the level of the first half of 21 (that is, 0.51 yuan / cubic meter), and there may be seasonal gas margin pressure in winter. The goal is to connect 500000 rural households in 2021. Tianlun Gas is expected to speed up the connection of rural coal to gas in the second half of 21 (that is, 140000 in the first half of 21), and the goal is to connect 500000 rural households by 2021. Looking ahead, the company plans to expand rural connectivity from Henan Province to Gansu Province, with the goal of connecting 600000 rural families a year in the next 2-3 years. The subsidy recovery process returned to normal in the second quarter of 21, and the cumulative collection ratio is expected to return to 70% in 2021 (62% in the first half of 21). Jointly develop new energy with Zhuhai Port in July, Zhuhai Port Co., Ltd. (000507 CN, unrated) acquired 11.96% of Tianlun Gas and carried out strategic cooperation on the development of new energy business, mainly Tianlun Henan farmer photovoltaic project. Zhuhai Port will provide financial support, while Tianlun will play the role of operation and maintenance after these projects are put into production, and the project is scheduled to start construction before the end of 2021. And contribute income in 2022. The valuation is based on Bloomberg consensus forecasts, Tianlun is currently valued at 5.8 times the price-to-earnings ratio for fiscal 21, compared with the industry average of 13.3 times, with a forecast compound annual growth rate of 11% for earnings per share for fiscal year 21-23. Its dividend yield is expected to be 5.4% (the industry average is 3.3%).